Famehouse: White Papers - Feb, 2014 by PopshopAgency

FEBRUARY 2014 YOUR GUIDE TO WHAT’S HAPPENING IN THE DIGITAL SPACE, AND WHY IT MATTERS.

www.famehouse.net

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WHAT IS INDUSTRY FLUX? THE DIGITAL REALM is constantly undergoing rapid transformation with new advancements being made nearly every day. As such, a large part of what we do at Fame House is conduct ongoing research on your behalf. We stay well ahead of the curve on the latest within our field in order to better plan, prepare and position you for success. While we go to great lengths to educate ourselves, we feel that you as our client should also be made aware of the latest and most important advancements within the digital arena. We are here to ensure that you not only keep up-to-date, but always several steps ahead.

What is Industry Flux?

Social Media Purchasing Power & Facebook

Twitter & 300: A New Road for Artist Discovery

Soundcloud Launches New Visual Player

Introducing Facebook Paper

Mindie – Video Sharing with a Killer Soundtrack

With this in mind, we are happy to provide you regular installments of Fame House’s Industry Flux – an ongoing report of what we feel to be the most important trends and innovations within the digital space in regards to how it impacts you and the careers of artists / entertainers worldwide.

Soundcloud Messaging Update

Quick Look: Bedloo

Twitter is Monetizing Your Need to Refresh

This document is exclusive to you as our client. We hope that this and all future installments prove valuable for you and your team.

Beats and the Music Streaming Game

How Streaming Music Impacts Sales

The New BitTorrent Bundle Packages

The LINE/WeChat Competition

Thank you for allowing us the privilege of working with you. Sincerely,

Michael Fiebach

Hisham Dahud

Founder / CEO Email: mike@famehouse.net Phone: (215) 815 - 6933

Digital Strategy Director Email: hisham@famehouse.net Phone: (650) 438 - 4251

Social Media Purchasing Power and Facebook’s Aging Demographics MATTHEW CHYLAK, Digital Marketing Associate

A new January poll conducted by Harris Initiative has made a clearer connection between different demographics’ willingness to buy something and their friends’ social media posts. 68% of polled 18-34 year olds answered that they were at least somewhat likely to make a purchase after seeing a friend post about it on social media accounts. These numbers decrease drastically as the age groups increase, with 53% of 35-44 year olds likely to purchase based on a social media recommendation and just 32% of baby boomers likely to use a social media endorsement to sway their purchasing power. This trend isn’t especially surprising in its own right, but carries significant weight when paired with the conversation over the last few months about whether Facebook’s teenagers are abandoning the site for alternate social media accounts, places like Twitter, Instagram, WhatsApp, and Snapchat.

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While Facebook insists that their site is continuing to be used at an increasing rate by users of all ages, an iStrategyLabs analysis of changes in Facebook’s user base shows that the number of high school users enrolled in the site is less than half of what it was three years ago. College-enrolled users have shrunk similarly, as Facebook continues to add users to their name rolls that are decreasingly susceptible to the sites’ advertising. Though Facebook has done a great job monetizing their site in the last few years, they need to find new ways to either bring users back into the fold or increase the site’s marketing value to older consumers. The former is certainly preferable for the company, though the latter might be a more likely option—because social media accounts are so relatively new, it’s difficult to know whether people who grow up in an era with Facebook, Twitter, and the like are just naturally more likely to respond to it as a purchasing reference. Regardless, Facebook must continue to find ways to show its marketing value or risk going the way of its social media predecessors.

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Twitter & 300 Entertainment: A New Road for Artist Discovery TIFFANY WILSON, Digital Marketing Assistant

In the vast amounts of tweets and favorites of Twitter sits a gold mine of music data that has yet to be fully utilized. Twitter recently struck a deal with 300 Entertainment that will give them access to Twitter’s previously unattainable user data on who is tweeting about which music artists and from where. The company is reportedly developing software that will organize and analyze the “full range of music-related data on Twitter”.

“Music is the largest topic of conversation on Twitter, so we’re really invested in building a winwin environment for fans, artists, labels, promoters and music services.” This nonmonetary, mutually beneficial deal gives 300 the first look at Twitter’s music related data, including exact locations of tweets, while developing Twitter a software to organize the data in a way that could potentially be used for deals with labels, artists, and brands down the line. Twitter’s head of music, Bob Moczydlowsky says, “Music is the largest topic of conversation on Twitter, so we’re really invested in building a win-win environment for fans, artists, labels, promoters and music services. This partnership is a great example because it is about helping artists and labels find each other. We’re looking forward to working with Lyor’s team in the coming months, and we hope they find great artists to sign as a result.”

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BOB MOCZYDLOWSKY, Twitter’s head of music

This deal touches on both fan discovery and the emergence of new artists. Lyor Cohen, former head of Warner Music Group, now signs artists for publishing and recording deals with new venture 300 and says they will be developing tools for artists to be discovered and amplified through Twitter data. All in all, Cohen hopes to use this software like a virtual A&R. He states that the goal is, “to mine Twitter for the kind of signs that music scouts have always sought, like a flicker of excitement about a fledgling band.” This partnership has the potential to establish Twitter as a force within the music scene, despite relatively little success with Twitter #Music. As one of the most talked about topics on the social network, this partnership with 300 could finally give Twitter an edge in the industry that they have been looking for. In an interview with Billboard, Cohen had to say: Q: So if you’re monitoring the data and you see that Joe Blow is trending, what haopens? A: I’m gonna sign him

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Soundcloud Launches a New Visual Player JULIA MCGUIRE, Digital Marketing Assistant

Soundcloud is making it easier for artists to customize their music with the launch of a new visual player. The embeddable visual player showcases the artwork of an artist, and features a refined look to Soundcloud’s signature waveform. Upon it’s release, artists Steve Aoki, The 1975, and Schoolboy Q we’re the first to utilize Soundcloud’s new feature, which is now available to all users. There is now the ability for ‘continuous listening’ in the new player. This feature showcases related tracks during pause and after finishing playback, giving users the ability to explore more music. Pro Unlimited users will have extra features, their Spotlight tracks will display in the player during pause and playback instead of related tracks. The existing formats will continue to be available with the updated waveform look.

Facebook Paper BRIAN ARANDA, Account Manager On February 3rd, Facebook introduced it’s newest app, Paper, that boasts “immersive designs and fullscreen, distraction-free layouts.” Paper allows users to view Facebook Stories from their best friends and Brand Pages, but also features the ability to create their own categories with relevant news, ranging from “Headlines” and “Tech” to “Score” and “LOL”. While this app presents itself simply as a new user experience, it also shows implications of how the News Feed could potentially evolve moving forward. Though the app is still in it’s infant stages, the most obvious response to Paper is it’s uncanny resemblance to Flipboard. For those unfamiliar with Flipboard, it’s an app that delivers curated news by category (these include social networks like Facebook, Twitter, Instagram, etc.) and allows you to build your own magazines by saving your favorite bookmarked articles.

PAPER VS. FLIPBOARD

With Facebook’s recent algorithm changes favoring more “high quality” news publishers over viral video and photo content, Paper will aim to be the go-to newsreader for Facebook users. There are currently no ads running on the new app, and it will be interesting to see how Facebook’s algorithms will affect the Brand Page posts users will see on the new interface. Facebook’s introduction of another stand-alone app is a way to get the product into people’s hands without an over-crowded, cluttered user experience. Delivering apps like Messenger and Paper give users an app that does one or two things well, rather than one app that attempts to do everything. Further, Paper allows Facebook designers to deliver a new experience to users without making an unannounced sudden change, which has been known to irritate Facebook users in the past. Although Paper is beautifully designed, introducing another app that doesn’t necessarily stack up to the features of other newsreaders may be a deterrent for users. Facebook hopes that this app will become habit forming among the early adopters, and it will be interesting to see how new features and updates will be rolled out in the coming months.

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Mindie – Video Sharing With a Killer Soundtrack JAMES GUTTMAN, Digital Marketing Associate

Soundcloud Messaging Update MAX PETE, Digital Marketing Associate

To say that Mindie, a beautiful and immersive video-sharing application for the iPhone, is just another Vine or Instagram would be painting only a part of a much bigger picture. While its 7-second video clips are nothing new, what sets Mindie apart is that the music tells the story of the video, instead of the images. Upon opening the relatively simple app, the user is prompted to link their Facebook and Twitter channels, and in seconds, they’re greeted by Mindie’s elegantly designed content feed. The first noticeable difference between Mindie and other video apps is that the video content takes up the entire device screen, instead of a square shape like Vine or Instagram. It’s surprising how much of an effect adding just a few more inches of screen coverage has on the user experience. The bigger difference, however, is that Mindie is all about music discovery. “Music is a catalyst for creativity,” co-founder Grégoire Henrion told TechCrunch. “It’s very complicated to shoot an interesting video, but if you put music on an awful video, it will make it interesting.” For Mindie, the video is the caption, not the music. While Mindie has similar social sharing ability to other video apps, the content takes center stage. With the swipe of a finger, the user gets another video, and more importantly, another song. The whole experience is very smooth – there are no load times whatsoever. With each new video, the user gets a window into a brand new personal experience that someone wanted to share with the world.

This month, Soundcloud launched a new messaging system, which brings it up to speed with the rest of the site. Messaging is now built into the “share” button below the tracks, which was previously reversed for link grabbing and embedding. This feature not only makes it easier to send your tracks to others, it also encourages users to send tracks that they like to their friends. With the new feature, Soundcloud has spam measures in place, such as limiting the ability to send the same message too many times to multiple individuals, and allows you to “mute” individuals and block them from following you. Look to the future: Soundcloud is looking to position itself even further ahead of the competition by making it easier for artists to share their music to potential fans. It’s going to be interesting to see how much this update catches on and if it eventually turns into a full-fledged Soundcloud chat system.

Mindie has done a great job of simplifying music sharing. After all, experiences are what drive our connections to songs, and inspire us to share.

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Quick Look: Bedloo ADAM RAPPOPORT, Digital Marketing Associate Crowd sourcing existed in the music industry long before artists were raising money to help fund their recording efforts through Kickstarter campaigns. In the early days of the Internet, artists would take to message boards asking fans for set list requests or original designs for merchandising. We didn’t know it at the time but theses types of direct to fan campaigns were the earliest signs of what we now call “crowd sourcing”. Artists have found success with a variety of different crowd sourcing campaigns and applications. Bedloo, a newly launched app out of Los Angeles, aims to simplify crowd sourcing by asking consumers two choice questions using photos, videos and music. The way Bedloo works is simple. The first step is selecting a category (sports, music, technology) for your question. You then upload two different images, videos or audio files, using your selected file to pose a short question like, “Which side are you on in the Justin Bieber arrest?” “Free the Biebs/Deport Bieber?” You are able to tag people within your question and choose which social media platforms you would like your question to be posted on. Bedloo also provides the option of only posting your question to your contacts and/or the entire Bedloo user base if you are looking for targeted responses. Once the votes start coming in, Bedloo tracks the results and provides a comprehensive breakdown for everyone to see that includes the age and gender of your voters. Users are able to comment on the question and responses to ensure engaging conversations are occurring. There are plenty of ways we envision Fame House clients using Bedloo. Examples include: Who should I work with on my next album? Which live staple would you like to see on the next studio album? What type of merchandise should we carry? Who should headline next year’s festival? Bedloo also provides a unique opportunity for Fame House clients, as this platform has yet to be used as a marketing technique for larger artists or festivals and the opportunity to be an industry leader is there for the taking Bedloo is the latest exciting application that connects you to your fans in an easy, non-intrusive manner and we look forward to strategically using Bedloo in the near future. Feel free to reach out to adam@famehouse.net with any questions.

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Twitter is Monetizing your Need to Refresh Feed NIKKI VOLPICELI, Digital Marketing Associate This said, it’s up to Twitter to decide to display ads more regularly in user feeds or to charge advertisers more for the same type of advertised content that they already pay for. Historically, the latter rarely ever works and Twitter (which actually owns the patent for their version of the ‘pull down to refresh’ technique presented in their newsfeed) will undoubtedly increase the ads we see as we swipe instead.

Twitter believes its next million is ready to be mined through their user’s index finger. The social networking and microblogging website says that the ‘refresh’ button played a huge role in part of its findings within its first quarter earnings report, which is due out next week. Twitter has found timeline views to be the best way to understand and measure a user’s engagement with the platform, and counts each refresh as a brand new Timeline view. A report from Quartz says, “That happened more than 158 billion times in the third quarter of last year, or 685 timeline views for each of its 231 million active users.” Advertisers will be able to visualize these refreshes as new opportunities for their featured content to appear more regularly at the top of user’s feeds, and it is likely they will be nowhere near disappointed at the ad expansion that’s to come. As sponsored tweets are increasing, so are the open opportunities for advertisers on Twitter.

This new development will live almost exclusively on mobile, since the need to refresh a feed on Twitter (or most other websites) almost ceases to exist on web — according to a AJAX web standards.

Twitter has “most recently generated $0.97 in revenue for every thousand timeline views; Americans were more valuable, at $2.58” QUARTZ

According to data, Americans are the most valuable swipers to date. Quartz adds, Twitter has “most recently generated $0.97 in revenue for every thousand timeline views; Americans were more valuable at $2.58”.

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Beats Aims to Change the Music Streaming Game KIMIA MADANI, Digital Marketing Assistant Is the music world ready for the next big thing in digital streaming services? Or has it already arrived? Dr. Dre, founder of Beats Music, launched a campaign in the yet to be conquered world of digital music streaming, entering a sector of the music industry currently pioneered by existing services like Spotify, Pandora, Rhapsody and iTunes. After being released on the global market, the Beats app aims to revolutionize music streaming with a hugely commercialized and celebrity-endorsed ad campaign on top of a promotional partnership with mobile carrier AT&T. The Beats vision involves marketing itself as “a new music service curated by people who believe music is emotion and life. Music that’s always right for you. Just hit play.” Its primary focal point involves a focus on human-curated experiences. Once the user downloads the app, they are walked through a series of steps to build suggested genres, artists, albums and playlists based on specific taste. Users can then create playlists based on their specific preferences or follow similar artists and brand names to listen to their playlists, one example being Dancing Astronaut’s Coachella 2014 playlist. Four sections divide the app into different modes based on your mood. One, “Just for You,” features albums separated by genre, including taglines such as “From the Mainstage: Volume 1,” “EDM’s Greatest Hits” and “The Pregame Progressive Party Starters, Vol 1.” Scroll to the right and you’ll find the second section, where users can create their own version of “The Sentence,” essentially a playlist of their choice according to exactly what they’re doing and feel like listening to at the exact moment they’ve tuned in. While not hugely innovative (rival service Songza curates playlists for listeners in an identical manner), the idea of the hand-curated playlist is still a fresh take on the power of listening in the moment, one that will no doubt become central to the world of music streaming as a whole. The third section, “Highlights,” promises to deliver top hits as selected by “the best experts in music.” The fourth and last, “Find It,” enables each user to discover new music as divided by genre, activity of choice (“whatever you’re into right now,” it proclaims, be that celebrating, chilling out, cooking, drinking and more), and curators once again, the experts in music, essentially whosoever each listener deems this to be.

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With the release of Beats, a flurry of speculation has ensued in regard to how streaming will impact music sales in the future. According to ABI Research, there are already around 29 million paying subscribers to existing streaming services. The Recording Industry Association of America estimates that in 2012, these services generated a healthy $1 billion for the U.S. music industry alone, and in 2013, more than 118 billion songs were streamed across an array of existing services, up 32 percent from 2012. However, despite all the surrounding hype for this particular service, just 5% of consumers currently pay for music subscriptions in the United States and United Kingdom. These numbers have risen primarily due to competitive service Spotify, which recently hit over 24 million active users, at least six million of those being paid subscribers. So far the most crucial difference between Beats and its rivals is the star power evident in its heavily marketed advertising campaign. Beats have focused on marketing themselves more like a label than any other service. Beyond heavy social media marketing campaigns across Facebook, Instagram, YouTube and more, the Beats hashtag #ClaimYourName has been popularized by artists Eminem, Miranda Lambert and Paramore. We are also looking at reported upcoming ads and commercials, including one that aired during the SuperBowl featuring Ellen DeGeneres. In accordance with its AT&T partnership, Beats offers a family plan starting at $14.99 a month, while individual subscriptions start at $9.99 a month.

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Perhaps in an effort to strike a balance with the rather elitist title the brand has taken on, as made evident by this rather pricey subscription charge, as well as that of the expensive Beats by Dre brand headphones that brought Beats to the forefront of music consumerism in July 2008, the mobile app has been made immediately available on iOS, Android and Windows rather than just starting out on iOS like many others. It also offers a free 7-day trial when users download the app and a free 3-month trial with the AT&T family plan before the $15 per month jump in pricing. However, while the partnership with AT&T is indubitably a lucrative business deal for Beats, it is not an automatic “recipe for success.”

Ultimately, Beats still needs to beat out the competition to reach the masses. But mixed reviews toward its release have caused some to question: What would make a music listener purchase Beats when they can attain identical services for free? Rivals like Spotify are perfectly content to continue pushing the same services at no charge to their users, and are even upping the ante, as shown by their trolling the Beats Music Twitter account after the app’s release. “Can you send us a DM? We’d love to help you #FreeYourMusic,” was the Spotify account’s rejoinder to many an unhappy Beats user’s reaching out to the company with questions and complaints regarding glitches in the free trial. In this way, Spotify created direct competition with the Beats hashtag #HitPlay. Since then Beats has increased interaction with their current user fan base via email and Twitter, even extending the 7-day trial to a 14-day one for those who downloaded the mobile app within the first week it was released.

According to Victor Luckerson, reporter-producer for Time.com covering business and money, “Everyone from Rhapsody to Napster have launched various deals with wireless carriers in the past that failed to catapult those services to wide success. Even MOG, the now defunct service Beats bought for a reported $14 million two years ago and on which Beats Music is partly based, tried a similar maneuver.” In past years we have seen music acquisition from the general public jump from downloads to live sets and prerecorded mixes, which are available on websites and apps such as SoundCloud, for example. Enter music streaming, where the competition is only growing in ferocity: music streaming mobile apps now generate the third-highest amount of revenue of all iOS apps, with Pandora in the lead, according to Tony Danova on Mobile Insider. Yet now more than ever, these services still need to win the hearts of young music lovers, aficionados and brand conscious consumers (as well as headphone wearers) that have not yet made the leap from downloading music, often illegally and for free, to purchasing a subscription. (This study did not include Spotify and Beats Music as contenders, since these services generate revenue through a monthly subscription basis rather than a more ad-based one; although Spotify has recently made mobile streaming free to all users instead of just subscribers, a strategic move most likely made to bump up ad-based revenue).

Predictions: If Beats targets young music consumers who have not yet purchased a subscription to any kind of streaming service, this could be the ultimate game-changer. Otherwise, it may not be seen as anything particularly revolutionary. For now it seems that the success of the Beats launch will coast on the hype generated by its celebrity-endorsed branding and the predicted moneymaker that its partnership with AT&T may prove to be. So will Beats deliver on the hype in order to shake up the world of music streaming? Looks like the music world will have to wait and see.

The Beats vision involves marketing itself as “a new music service curated by people who believe music is emotion and life. Music that’s always right for you. Just hit play.”

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How Streaming Impacts Music Sales ARIELLE ABILO, Digital Marketing Associate 2013 was an important year for music streaming, and with additional streaming services launching in 2014, it seems like there’s a service that’s made for everyone. This rise in streaming services is great for on-the-go access to almost every song imaginable across different platforms. But with low, flat rate monthly costs, how does streaming impact music sales? The full year sales numbers from 2013 have surfaced, giving us the ability to access the impact of streaming on the market. Nielsen reports that album sales as a whole were down 6.3% in 2013, which comes as no shock, considering the music industry trends in the past few years. However, the demise in album sales saw a 32% increase in overall music streams across both free and paid platforms. It is difficult to differentiate the streams from free users and paid users (i.e. people who pay for Spotify vs. people utilizing Spotify’s free, ad-supported service), but this is a shift in the right direction. The majority of streaming subscribers are music fans that were digital music buyers and iTunes users in the past. According to Nielsen, 50% of streaming subscribers buy album downloads every month and 26% still buy CDs every month. This shows that streaming can lead to additional music discovery, as fans are introduced to more music than ever through additional features like Spotify’s radio function. However, if users continue to stream music and are paying a monthly fee to access this infinite content, there is less incentive for subscribers to buy music outside of their streaming services. Consumers are gradually shifting from buying albums to buying a subscription. Because an increasing number of people are using subscription services (free or paid), there is an opportunity for subscriptions to drive more long-term revenue. Individual album downloads will remain the best tool for digital music consumers who don’t spend a monthly stipend on music. But after 2013’s positive shift to streaming, it will be interesting to examine how many more people shift to the subscription model in 2014. Sources: Nielsen and Music Industry Blog

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BitTorrent Bundle Packages AMANJEET KAUR, Digital Marketing Assistant With our lives becoming increasingly digital, its no surprise that many of us obtain a lot of our online content through torrenting files. Although this may not be the most accepted way of going about, it hasn’t been easy to stop this method due to the vastness of the Internet. BitTorrent has been disapproved of for many years because of the ease at which consumers could access files without having paid for it. Even with all of this, torrenting is becoming more and more popular. In order to capitalize on the popularity of this medium, BitTorrent launched Bundle, which allows the content creator to embed a mini-store inside their work. In order to adapt to the constant changes in the digital world, music, television and film have figured out a way to make money off of the “virality” of content. This basically means that the more viral the content gets, the more money it ends up making. Musicians have been quick to create Bundles now that BitTorrent has this new torrent format. Moby’s eleventh studio album “Innocents” was downloaded 8.9 million times. Of those who downloaded the album, 419,000 signed up for his email list and 130,000 bought it on iTunes. It’s human nature to want to share what we see with others, so the more we share something, the more valuable it becomes. Through bundles, artists have fewer restrictions on the amount of material they’re allowed to have on each file, which ends up being a more cost efficient option for them. The whole idea of BitTorrent bundles seems to be a breakthrough in sharing of data without the bad reputation of illegally downloading material. This will finally be a way to capitalize on popularity of content verses amount of content sold.

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The LINE/WeChat Competition RYAN HALL, Digital Marketing Associate LINE and WeChat are currently in competition as the largest mobile messaging apps in China. LINE currently has 330 million registered users with an estimated 202 million monthly active users. LINE utilizes in-app content like games and stickers, which are sold to users. Currently LINE has the highest revenue of any non-gaming app available. WeChat offers interesting capabilities like “drift bottle” and “Find people nearby”. Drift bottle sends out a voice or text message into a virtual “sea” for people to pick up and start a convo. There is a 1/10 chance that someone will get it and brands have used this for releasing temporary promotions. How are artists/brands using these apps? Paul McCartney has created an account on LINE and grew to 3.1 million followers in the first three weeks. Compare this to his 1.6 million Twitter followers and you’ll realize there’s something there. His account carries his very own custom sticker packs for sale. WeChat’s People Nearby uses location-based technology to show you who is on WeChat in a specified radius and allows you to start a conversation with them. This can be used to send announcements to people in proximity of an event. With such incredible growth surrounding these Chinese messaging apps over the recent months, we think this is something worth mentioning and keeping track of. Especially as a new way to emerge into new, untapped international markets. Though both are largely China-based, LINE boasts 10 million users in Mexico and other Latin countries and continues to grow elsewhere.

THANK YOU FOR READING LET US KNOW IF YOU HAVE ANY QUESTIONS, CONCERNS, OR IDEAS REGARDING ANY OF THE TOPICS ABOVE.

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